WSJ: Why a Posh Store Is Selling on eBay

WALL STREET JOURNAL | RAY A. SMITH

Dallas's Stanley Korshak clothing store has long been known for its high-end merchandise, wealthy clientele and personalized customer service. But as owner Crawford Brock watched the recession take hold, a new idea clicked.

Mr. Brock decided to sell some of his excess merchandise, which included $5,700 Kiton sport coats and $900 Christian Louboutin heels, in a decidedly more downscale venue: eBay.

Since late last year, the retailer has been quietly unloading unsold clothing and accessories on the online auction site under the screen name takeitawayluxury.

Stanley Korshak's eBay experiment is an example of how one of the worst retail environments in decades is spurring stores to innovative -- and somewhat controversial -- ways of coping. Members of Threadwize, a trade group of 10 U.S. specialty stores, are considering selling on eBay, too, says President George Bass; last fall, his New Orleans men's store became the first of the group to sell on eBay.

I found out about Stanley Korshak's eBay gambit when a friend who's a bit of a clotheshorse was on eBay searching for Ralph Lauren Purple Label clothing. He clicked on a Purple Label tuxedo that caught his eye and was directed to takeitawayluxury. A link at the bottom told him it was Stanley Korshak. The auction site's bargain-basement image seemed at odds with the carefully guarded brand of a luxury retailer.

Old-line, high-end independent clothing stores have long been holdouts when it comes to new technology. It's only in the past 18 months or so that specialty stores have sent customers mass emails, which in the past would have seemed less than genteel. Many specialty stores still are resistant to online sales, feeling high-end clothing needs to be touched and tried on. For years, Stanley Korshak's sales associates have been known to travel to customers' homes for wardrobe consultations and closet evaluations.

But the downturn has put pressure on all stores to go online or go extinct. In recent months, Stanley Korshak has generated a database of 70,000 customer emails, which it uses to advertise as well as send alerts for special events, sales or new merchandise. It set up a Facebook page for a women's satellite store branch called The Shak. It launched its official e-commerce site in October. For the time being, the site sells only accessories that aren't sized, such as handbags and jewelry. Mr. Brock says visits to the site now total about 700,000 a month.

Stanley Korshak's eBay effort has a relatively low sell-through rate -- the percentage of goods posted that are sold -- of 16.5%, according to Advanced Economic Research Systems Inc.'s Terapeak, a company that tracks sales on eBay. It has captured $37,239 in sales, the firm says, and sold just 151 items out of 915 listed for the 90-day period between Jan. 20 and April 19.

In recent days, a Loro Piana sweater vest that the retailer says was originally priced at $975 sold for $195 on eBay, and a pair of Bottega Veneta sandals originally priced at $920 sold for $242.50.

People who buy Stanley Korshak goods on eBay find some of its personalized touches. When merchandise arrives, it's tissued and neatly packaged in one of the retailer's signature gift boxes.

Mr. Brock says he is pleased with sales on eBay so far. Still, the store remains ambivalent about how openly to reveal itself on eBay. At first, Stanley Korshak identified itself with a line that read: "Please check out our regular priced merchandise at:www.stanleykorshak.com."

But recently, Mr. Brock removed that link and ID tag. "We've been thinking it through, and we're not so sure we want people to know necessarily that this is Stanley Korshak," he says. "We may turn it back on, but right now it's off."

One risk of his strategy: upsetting fashion designers who don't want their goods sold on eBay. Labels have come, however reluctantly, to expect some discounting in stores, as well as resales to T.J. Maxx and the like. But eBay makes them uneasy, in part because their stuff is being auctioned off, allowing customers to determine the final price. "In the retail world, that is just a no-no," says Robert Burke, a former fashion director at Bergdorf Goodman who owns a luxury-goods consultancy.

Mr. Brock says he didn't consult with the brands he has sold on eBay and hasn't gotten any feedback. He's aware the brands might disapprove, but he argues that eBay isn't really that different from the outlet stores that high-end department stores use to get rid of unsold goods. He notes that many individuals try to turn a profit by buying luxury goods at stores on sale and reselling them on eBay.

The other risk that Stanley Korshak and the brands face is becoming associated with bargain shopping. Mr. Burke notes: "Because [eBay is] such a big and vast selling site, the product would not be presented in a high-end and luxury manner acceptable to the brands that have worked so hard to create their image."

Indeed, one man who bought a Bamford & Sons dress shirt from takeitawayluxury for $80 declined to give his name for this article. He says he didn't want acquaintances and colleagues to know he was shopping on eBay. "There's a little bit of a stigma," he told me. "I'm not ready to start taking the ribbing."